Orissa High Court
Ajanta Enterprisers vs Hoechst Pharmaceutical Ltd. And Ors. on 1 September, 1986
Equivalent citations: AIR1987ORI34, AIR 1987 ORISSA 34
JUDGMENT S.C. Mohapatra, J.
1. This is an appeal under Order 43, Rule 1(a), Civil Procedure Code, where direction for return of the plaint is assailed.
2. Plaintiff-appellant is proprietor of a business concern at Cuttack. He entered into an agreement with defendant No. 1, a public limited company having its head office at Bombay, for being appointed as stockist and distributor of some of the products of the latter. On account of termination of the contract after some period of its continuance, plaintiff filed a suit against the defendant No. 1-Company and its officers for prohibitory and mandatory injunctions and for recovery of Rs. 2,19,538/- with 17% interest per annum. In view of Clause 7 of the agreement, the defendant No. 1 claimed that the Cuttack Court where the suit has been filed has no jurisdiction to try the suit. Clause 7 of the agreement reads as follows : --
"All disputes arising out of this agreement shall, failing arbitration, be litigated in Courts having jurisdiction in greater Bombay."
Trial Court having decided the question of jurisdiction as a preliminary issue in favour of the defendants and having directed return of the plaint, this appeal has been filed.
3. A perusal of the plaint indicates that the plaintiff disclosed the clause in the agreement in the plaint itself and claimed that notwithstanding the same the Court at Cuttack would have jurisdiction. The plaint was admitted and the defendants appeared on being summoned. They took adjournments for about eight months to file their written statement where they took the plea of want of jurisdiction. The parties were heard under Order 10, Rule 1, C.P.C. and Issues were settled in which Issue No. 4 was relating to jurisdiction. After giving opportunity to the parties to furnish list of witnesses and to summon them, the suit was posted for hearing to 26-2-1981. On the said date the defendants filed a petition for deciding the question of jurisdiction as a preliminary issue. On that petition, the matter was posted to 26-3-1981 for hearing. Defendants took time on that date and on the next date. The matter was posted to 11-5-1981. On the prayer of both the parties, it was posted to 7-7-1981 on which date at the request of the lawyers of both parties it was posted to 23-7-1981 for hearing. Defendants did not move the petition on 23-7-1981 which was rejected and the suit was posted to 17-8-1981 for hearing. Plaintiff filed requisites for summoning witnesses. On 17-8-1981 defendants filed an application -for adjournment to get opportunity to adduce evidence. The suit was posted to 9-9-1981 on which date the second petition for preliminary hearing of the Issue relating to jurisdiction was filed. After the hearing was deferred for about four years, it was at last heard and the impugned order was passed on 20th Aug., 1985. Thus, about six years after presentation of the plaint the plaint is being directed to be returned.
4. In the trial Court, the learned counsel for the plaintiff contended that Clause 7 in the agreement is oppressive inasmuch as it would be very expensive for the plaintiff to proceed with the litigation at Bombay and it would be inconvenient to procure the attendance of the witnesses who are available at Cuttack and Bhubaneswar, and in case the hearing is taken up by the Cuttack Court it would be convenient to call for most of the documents available at Cuttack or Bhubaneswar and I prove the same causing no inconveneience to defendants if the suit is tried at Cuttack as the Company has an office at Cuttack. The defendants on the other hand relied upon Clause 7 claiming jurisdiction of the Courts in respect of greater Bombay to entertain the suit. While the plaintiff relied upon the decisions reported in (1976) 42 Cut LT 696, (Arja Venkata Ratnam v. Calendar Printing House of Sivakasi); AIR 1975 Guj 72, (Snehalkumar Sarabhai v. Economic Transport Organisation) and AIR 1978 Delhi 183 (FB), (Shri Ram Rattan Bhartia v. Food Corpn. of India), the defendants relied upon the decision reported in AIR 1971 SC 740, (Hakam Singh v. Gammon (India) Ltd.). Distinguishing the decisions reported in (1976) 42 Cut LT 696 and AIR 1975 Guj 72, it was urged by the defendants that in those two cases the amounts of claim were negligible being Rs. 358.92 paise and Rs. 1,207.92 paise respectively, whereas the claim in the present case is for Rs. 2,19,538/-. Considering the facts and the circumstances and the amount of claim, the trial Court found the contention of the learned counsel for the defendants to be justified. It was held that Clause 7 of the agreement would not be oppressive in the facts of this case.
5. After considering the decisions reported in AIR 1971 SC 740 (supra), AIR 1975 Guj 72 (supra), (1975) 16 Guj LR 31, (Rai & Sons P. Ltd. v. Trikamji Kanji) and (1970) 1 Mad LJ 548, (Black Sea State Steamship Line v. Minerals and Metals Trading Corporation of India Ltd.), in the, decision reported in (1984) 1 Orissa LR 532 : (AIR 1984 Orissa 182), (Patnaik Industries (Pvt) Ltd. v. Kalinga Iron Works), R. C. Patnaik, J, culled out the following principle:
".....the agreement between the parties does not oust the jurisdiction of the Court. It may operate as an estoppel against the parties but it cannot deprive the Court of its power to do justice. Ordinarily the Court would have regard to the choice of the parties. Where, however, the Court whose jurisdiction has been ousted is satisfied that the stipulation would operate harshly is oppressive in character, inequitable or unfair, for the ends of justice, it can relieve the party of the bargain. The ouster clause can be ignored."
This principle has also been accepted in two later decisions of this Court reported in AIR 1985 Orissa 106, (Paradeep Port Trust v. Hindusthan Mercantile Transport Corpn. and (1986) 62 Cut LT 43 : (AIR 1987 Orissa 30), (Indian Rare Earths Ltd. v. Unique Builders Limited).
6. Applying the aforesaid principle it can safely be concluded that by agreement the jurisdiction of Cuttack Court is not completely ousted. The parties agreed that the jurisdiction would be restricted to the Courts having jurisdiction over greater Bombay. Absence of the expression 'alone' or 'only' would have no effect since the language of Clause 7 is clear to that extent. Use of the words 'only' or 'alone' would be express restriction whereas non-use of the same would not detract from that inference in view of clear implication from the language of the clause.
7. Whether the agreement would be oppressive or harsh in a given case would depend upon the facts and circumstances of each case. In the present case the following facts are tale-tell:
(i) But for the language of Clause 7 Cuttack "Court has jurisdiction;
(ii) Disclosing the restrictive clause in the plaint itself the same as presented in Cuttack Court which was admitted without being returned;
(iii) Clause 7 which is within the knowledge of the defendants would have.been utilised at the first instance on the date of appearance itself by the defendants by moving the Court for exercise of power under Order 7. Rule 10, C.P.C., for return of the plaint. The same was not done and adjournments were taken for eight months from time to time to file the written statement when for the first time the question of jurisdiction of Cuttack Court was raised;
(iv) After the written statement was filed both parties were heard under Order 10, Rule 1, C.P.C. and the Court was also not moved at that stage for return of the plaint which settled the issues amongst which one was relating to jurisdiction;
(v) The suit was posted for hearing after giving the parties opportunity of summoning the witnesses. Plaintiff took steps. The defendants, however, on the date of hearing prayed for adjournment to adduce evidence.
(vi) on 26-2-1981, an application was filed to hear the "question of jurisdiction as a preliminary Issue deviating the normal rule, of hearing all the Issues together. Although the same was posted for hearing, both parties took sometime and lastly on the date of hearing the defendants not being present the application was dismissed, and
(vii) Plaintiff took steps for hearing of the suit by summoning witnesses. The defendants on 9-9-1981 filed the second petition for considering the question of jurisdiction.
8. Thesecondpetitiondated9-9-I981 filed by the defendants was heard four years after. If the Cuttack Court would have completely lacked in territorial jurisdiction, the question would have been different and as the language of Order 7, Rule 10, C.P.C., discloses the plaint could have been directed to be returned at any stage of the proceeding. This is, however, a case where the Cuttack Court did not lack in territorial jurisdiction. By agreement of the parties, the jurisdiction was restricted to the Courts having jurisdiction over greater Bombay. Normally the wishes of the parties are to be respected and as has been held by R.C. Patnaik, J. in the decision reported in (1984) 1 Orissa LR 532 : (AIR 1984 Orissa 182) (supra) the same would operate as estoppel. Therefore, in the maximum the entertainment of the suit by Cuttack Court could have been an irregular exercise of jurisdiction. The defendants by their own conduct in not raising the question in the first opportunity shall be deemed to have waived their right, specially when in their written statement raising the question of jurisdiction they have assailed the other assertions also and entered into contest. If the issue would have been tried as a preliminary Issue and would have been answered against the defendants, in appeal or revision the same could not have been raised in view of Section 21, C.P.C. Therefore, when the Cuttack Court did not lack in territorial jurisdiction but for the agreement, five years after the direction for return of the plaint would be a hardship and interest of justice would not demand return of the plaint.
9. It is true that the decision of Gujarat High Court in AIR 1975 Guj 72 (supra) and of this Court in (1976) 42 Cut LT 696 (supra) involved negligible amount and in that view it was held that continuance of the litigation at a distant place would be oppressive. In this case, as has been revealed by the plaintiff which has not been denied by the defendants, the witnesses belong to Cuttack and Bhubaneswar. To take the witnesses to Bombay would cause great prejudice to the plaintiff. It would also amount to hardship. In that view the return of the plaint would not be justified.
10. The matter can be examined from another angle, A breach of contract can adequately be compensated. Violation of Clause 7 would amount to a breach of contract. The defendants have not explained how the injury on account of this breach of contract in filing the suit at Cuttack would be such irreparable that it cannot be compensated. There was no provision for counter-claim earlier. By amendment to the Code of Civil Procedure by Act 104 of 1976. Order 7, Rule 10-A provided for counter-claim by the defendant. The cause of action arising before filing of the written statement can be included in the counterclaim, as the language of Order 7, Rule 10-A discloses. Prohibition to the plaintiff not to file a suit at Cuttack in one sense would amount to an injunction. Where there is no irreparable injury, no injunction would be granted. When under the Code part of the cause of action arose at Cuttack, filing of a suit at Cuttack is not contrary to Section 20(c), C.P.C., and any violation of the contract not to file the suit at Cuttack and to file the suits in Courts having jurisdiction over greater Bombay can be adequately compensated being a breach of term of a contract only.
11. Mr. B.K. Behura, the learned counsel appearing for the respondents, strongly relied upon a decision reported in (1983) 4 SCC 707, (Globe Transport Corporation v. Triveni Engineering Works) which is a case decided mainly oh the question of good faith under Section 14 of the Limitation Act. In that case the plaint was returned to be presented in the Court as agreed to by the parties. The question of oppressive character or harshness of the agreement was not considered in the said decision. There can be no doubt that the Court has jurisdiction to return the plaint in view of a clause in the agreement restricting the territorial jurisdiction. It would, however, not be justified in all circumstances and the same would not be the only course open to the Court.
12. In conclusion, five years after the presentation of the plaint when the suit is ready for trial there being no material as to how the defendants would be prejudiced if the trial is taken up by the Cuttack Court, there is no justification for return of the plaint by the Court. The order is accordingly liable to be set aside.
13. In the result, the appeal is allowed. Since all the parties have appeared in this Court, they are directed to appear before the trial Court on the 29th Sept., 1986, on which date the trial Court shall fix the date of hearing of the suit. Parties shall bear their own costs in this appeal.